SAG health and pension plans making cuts

Changes going into effect starting January

Citing major losses in its investments and lower employer contributions, the health and pension plans for the Screen Actors Guild are significantly reducing benefits and increasing premiums in January.

And the changes, announced Thursday in the plans’ newsletter to members, have already become a factor in the SAG election with self-styled moderates and progressives battling each other in a spirited campaign.

“So far this year, contributions generated from employment-based earnings are down 10%,” the newsletter said of the health plan. “This represents the largest drop in Plan history and does not account for the full impact of the decrease in SAG-covered television pilots, which has yet to be realized. The Health Plan also faces a continuing threat of inflation as the cost of healthcare continues to rise about 9% annually.”

Because of SAG’s prolonged contract stalemate, nearly all new TV pilots signed with AFTRA this year. And the Unite for Strength faction responded to the disclosures by blaming the Membership First group for its strategy of hostility toward AFTRA, which resulted in AFTRA negotiating separately from SAG.

“The cost of the decision last year to fight with AFTRA rather than partner with them on our biggest contract negotiation has already been deeply felt, but it hasn’t been fully realized yet,” said board candidate Ned Vaughn in a message to Unite for Strength supporters with the title “Vote to Protect Your SAG P&H Benefits.”

SAG First VP Anne-Marie Johnson, who’s heading the Membership First ticket as its presidential candidate, told Daily Variety that the faction would have a response Friday. Membership First has continued to blast the new feature-primetime contract on grounds that it doesn’t address the need for actors to be paid adequately for new-media work.

The two plans, which are operated jointly by trustees representing SAG and the entertainment industry, made the disclosures in the newsletter in order to meet deadlines on notification requirements.

SAG’s pension plan had disclosed in March that the value of its assets had declined by 22.7% — representing a loss of $800 million — in 2008, which would have left it with a value of about $2.1 billion (Daily Variety, April 1).

This week’s newsletter said the decline left the pension plan with 78% funding for its obligation in the “seriously endangered” category, requiring a reduction in accrual rates for benefits from the current 3.5% to 2% as of January. It explained that an actor who made $50,000 annually for 20 years starting next year would then have an annual benefit of $27,500 — as opposed to the annual benefit of $32,846 for the same actor who has already worked for 20 years.

“This action does not reduce or in any way affect the benefits currently being paid to pensioners or their beneficiaries nor does it reduce or in any way affect the amount of vested benefits accrued prior to Jan. 1, 2010,” the newsletter said.

As for the SAG health plan, Plan I monthly premiums will hike from $50 to $83 with Plan II rising from $65 to $98. The plan will also charge senior performers a premium for the first time of $25 a month.

The plan is also adding a $250 per-year deductible for mental health and chemical dependency outpatient services; an increase in the prescription drug deductible to $150 a year from $100; a limit on sleep aids coverage to 21 days a month; and elimination of coverage on all prescription non-sedating antihistamines.

Vaughn said in his message that he could not support his family without “solid” health insurance and the expectation of a secure pension.

“Many of you are in the same boat,” he added. “But even if you’re not, we all understand just how crucial those benefits are. Will we go back to fighting with AFTRA and further endanger our benefit plans? Or will we unite with AFTRA to increase our bargaining power and strengthen the security of our health and pension benefits? This election will determine our course. It’s clearer than ever that we cannot go back to the go-it-alone approach.”